English Top Soccer League Riches Targeted Amid Fund Concern

Doyen Sports, an investment fund that finances player purchases for soccer clubs, wants to expand into England’s Premier League, the sport’s richest domestic competition, its top executive said.

Doyen is looking to invest 200 million euros ($273 million) after profiting from its first 100-million euro venture, according to Nelio Lucas, the 35-year-old Portuguese chief executive officer of the Malta-registered subsidiary of London-based Doyen Group. He declined to identify the central European businessmen who are backing the fund.

Doyen lends cash to clubs to sign players, and expects to be repaid in three years. The teams can keep the players and repay the debt, or sell the athletes, returning the loan money and a share of any profit from the transfer to Doyen. Lucas says the setup doesn’t breach a Premier League ban on funds owning stakes in the economic rights of athletes.

“We can operate with this model in the Premier League and we’re preparing a version of this model especially for the U.K.,” he said in an interview in Sao Paulo, Brazil, where the company has started signing up teams, including Pele’s former club Santos. “At the end of the day, there is also a big gap between the big clubs and the other clubs. I’m sure the Premier League sees us with good eyes.”

While Premier League officials wouldn’t comment on Doyen’s plans, they said rules ban so-called third-party ownership. Doyen says it loans money and isn’t involved in such ownership.

Threats

“We believe that the practice threatens the integrity of competitions, reduces the flow of transfer income into the sport and has the potential to exert external influence on player transfer decisions,” league spokesman Nick Noble said in an e-mail this week. “Any lending arrangements entered into by Premier League clubs must not allow lenders to exert influence over player transfers.”

Soccer’s governing body FIFA wrote to its members on May 12 to tell them it had completed two studies on third party ownership. It will discuss the issue, and possible new regulations, at its annual congress before the start of the World Cup next month in Brazil.

Some sports attorneys said Doyen may find it hard to overcome resistance to its expansion plan.

Daniel Geey, a lawyer with Field Fisher Waterhouse LLP, said Doyen would be “taking a regulatory” risk if it tries to enter the Premier League.

Something Different

“To me they would have to offer something impressively different to what’s already available,” Geey, who specializes in soccer law, said by phone.

Doyen would need to show the league that it has no ownership claim on the players’ contracts or control over the club’s operations, said Oli Hunt, a partner at Onside Law.

Doyen Sports is a subsidiary of Doyen Group, a company that invests in markets including commodities and real estate, according to a presentation in Sao Paulo by Lucas. It has assets in countries including Turkey and Libya. Doyen is also the owner of Rixos Hotels, which sponsors Chelsea, the Premier League club owned by billionaire Roman Abramovich.

Doyen got involved in sports after the global financial crisis in 2008. One of the company’s biggest and earliest transactions was in 2011, when it took Colombian striker Radamel Falcao from Portugal’s FC Porto to Atletico Madrid for 40 million euros, even though the Spanish team was heavily in debt. The 28-year-old stayed two seasons, helping Atletico win the Europa League and Spanish Cup before joining billionaire-owned Monaco for a reported 60 million euros.

‘Everybody’s Happy’

“It was the most expensive player so far but it worked,” Lucas said. “The club is happy, we’re happy, the player is happy, everybody’s happy.”

Doyen still has a relationship with Atletico. The team, which for most of its history has played under the shadow of crosstown rival Real Madrid, is having a historic season. It will be Spanish champion for the first time since 1996 should it avoid defeat to Barcelona in its last league game tomorrow. Seven days later it meets Real, soccer’s richest team, in the Champions League final.

“We are sharing the risk,” Atletico CEO Miguel Angel Gil said. “It’s an interesting transaction because if the player doesn’t do well the club doesn’t lose everything.”

Making deals in the Premier League may not be as easy. Under the terms of its contract as the Premier League’s title sponsor, the U.K.’s second-biggest lender Barclays Plc has preferred status among the championship’s 20 clubs.

Banks Wary?

Still, according to Lucas, traditional banks are likely to remain wary of soccer because of its “unique” environment.

“The money is only one part, the most important part is the networking,” Lucas said. “I know all the sports directors, all the presidents. They’re my friends for so many years. There’s a friendship situation in order to negotiate.”

Even though bank lending has dried up in Spain, some teams remain uninterested in dealing with funds such as Doyen or Quality Sports, a company operated by former Chelsea CEO Peter Kenyon and Jorge Mendes, a Portuguese businessman and agent with links to world player of the year Cristiano Ronaldo and Chelsea manager Jose Mourinho. Lucas says Doyen’s model is different to Quality Sports because it doesn’t directly buy stakes in players’ economic rights.

“We’ve never used it and I don’t think we’ll use it in the future,” Fernando Roig Nogueroles, director general at Spanish top division team Villarreal, said in an interview. “These groups usually have two parts, representing players and lending money. Sometimes it seems they are managing clubs.”

Background

Lucas learned his trade under Israeli businessman Pini Zahavi, a former journalist turned broker of some of soccer’s biggest transfer deals. While Zahavi became known as a “super agent” in U.K. for brokering deals including Russian billionaire Roman Abramovich’s takeover of Chelsea, Lucas didn’t get attention.

About four years ago Lucas approached two wealthy businessman, whom he declined to identify, with a passion for soccer. He told them they could enjoy the world’s most popular sport, and make a profit from it. Three additional investors have signed up for the group’s second 200 million-euro fund. The money staked by the investors is a fraction of their wealth, according to Lucas.

“The group is backed from private families,” he said. “It’s very clear we have so many investments in so many things. So many billions in turnover. So 100 million it’s a little drop in the ocean. Now 200 million, that’s two drops in the ocean.”

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